* Pact of major political importance

* Implementation a concern

By Katie Nguyen and Frank Nyakairu

KAMPALA, Oct 22 (Reuters) - An African Union (AU) pact providing rights for millions of displaced people is encouraging but ensuring all parties respect it will be a big challenge, the International Committee of the Red Cross said on Thursday.

Africa hosts some 12 million internally displaced people -- almost half of the world's displaced population - who have been uprooted because of conflict and natural disasters.

Unlike refugees, who have fled another country and have a global U.N. agency dedicated to protecting them, internally displaced people sheltering in makeshift camps, shanty towns or scattered in local communities receive little or no protection.

The pact, which integrates the main aspects of international humanitarian law, would for the first time oblige AU states to prevent displacement, come up with lasting solutions to its causes and provide those displaced with basic rights.

"That the African Union has succeeded in negotiating a convention on an issue which for us is one of the biggest humanitarian issues ... is a major achievement," ICRC President Jakob Kellenberger told Reuters on the sidelines of an AU summit on refugees, returnees and internally displaced.

"As a political act it's of major importance," he said.

AU heads of states meeting at the summit in Kampala on Thursday and Friday are widely expected to adopt the treaty - the first legally binding agreement on internal displacement with a continental scope. However, 15 states out of the AU's 53 must ratify the convention for it to come into force.

Among the heads of states attending are Zimbabwe's President Robert Mugabe and Somali President Sheikh Sharif Ahmed.

International aid officials and civil society groups have applauded the AU for addressing an issue African leaders say hampers development and causes instability.

However, implementation is a concern. Many Africans question whether governments will adhere to the pact's obligations when leaders across the continent disregard their own constitutions.

Kellenberger said the pact lacked a detailed compliance mechanism, common to nearly all treaties in international law.

But he said an article stipulating regular reviews of the pact and countries' adherence to it was a good start.

Kellenberger said another challenge was ensuring that "non-state armed groups" - diplomatic jargon for rebel groups - would respect the convention.

Under the agreement, rebel groups would be bound to ensure freedom of movement, security, sanitation, food, water, health and shelter for internally displaced people. The pact would also prohibit them from recruiting children or forcing them to fight.

"But ensuring respect is a big challenge but not only in the framework of this convention, and not only in Africa," he added.

(Editing by Elizabeth Fullerton)

(For more news on humanitarian issues please visit www.alertnet.org; email Alertnetnewsdesk@reuters.com)

AlertNet news is provided by